BSP sees strong GDP growth sustained in second quarter

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said the strong gross domestic product (GDP) growth in the first quarter of the year was likely sustained in the second quarter due to robust consumer spending brought about by the peaceful national elections last May 10.

BSP assistant governor Cyd Tuano-Amador told reporters that economic indicators being monitored by the central bank point to a sustained economic growth in the second quarter of the year after the country’s GDP growth zoomed to its fastest pace in almost two years, expanding by 7.3 percent in the first quarter of the year from 0.5 percent in the same quarter last year.

“It will be a good second quarter, because of the electoral cycle for one and we think that there is still some base effect because of the low growth numbers last year,” Amador said.

She said the GDP growth in the second quarter was in line with the revised growth target set by the Cabinet-level Development Budget Coordination Committee (DBCC).

The DBCC revised upwards its GDP growth target to five percent to six percent instead of 2.6 percent to 3.6 percent this year after a stronger-than-anticipated growth in the first quarter of the year.

“It’s a good number, it’s consistent with the growth path of five percent to six percent set by the DBCC,” she added.

The BSP official also cited the strong recovery of the country’s exports and imports that also forced economic managers to raise the growth targets.

The DBCC raised the exports growth target to 15 percent instead of 12 percent this year and the imports growth target to 18 percent instead of 15 percent.

Earlier, National Economic and Development Authority acting director general Augusto Santos announced that the agency expected the second quarter GDP growth in the second quarter to be higher than the growth registered in the first quarter.

Santos said the major growth drivers in the quarter would be the global economic recovery and election spending. 

“A growth higher than 7.3 percent is possible because of the global economic recovery plus there was still a lot of election spending in the second quarter. There were no destructive typhoons in the second quarter so I suppose agriculture made a little bit of pick up,” Santos told reporters.

The NEDA chief also cited that remittances would likely provide a boost in secondquarter growth as overseas Filipino workers (OFWs) sent more money back home for tuition and other school requirements.